Free Online WACC Calculator – Instantly Calculate Weighted Average Cost of Capital

WACC Calculator

What Is WACC (Weighted Average Cost of Capital)?

The Weighted Average Cost of Capital (WACC) is a crucial financial metric used to determine a company’s average cost of financing through a mix of debt and equity. It’s a key factor in investment analysis, business valuation, and financial decision-making.

In simple terms, WACC represents the average rate a company is expected to pay its stakeholders to finance its assets. A lower WACC indicates cheaper financing and lower risk—making it an essential metric for investors and business owners alike.

Why Use a WACC Calculator?

Manually calculating WACC can be time-consuming and prone to errors. That’s why we built a free online WACC Calculator—to help you quickly compute your capital costs with accuracy and ease.
With our tool, you can:

  • Instantly calculate WACC
  • Eliminate manual errors
  • Save time on complex formulas
  • Use it for DCF valuation, investment analysis, or budgeting decisions

WACC Calculator

Quickly calculate your Weighted Average Cost of Capital (WACC).

















How to Use the WACC Calculator

To calculate your WACC online, just follow these simple steps:
  1. Enter the cost of equity (Re)
  2. Enter the cost of debt (Rd)
  3. Input the market value of equity (E)
  4. Input the market value of debt (D)
  5. Enter the corporate tax rate (Tc)
Click "Calculate", and your WACC will be displayed instantly.

WACC Formula Explained

The formula for calculating WACC is:
WACC = (E / (E + D)) × Re + (D / (E + D)) × Rd × (1 - Tc)
Where:
  • E = Market value of equity
  • D = Market value of debt
  • Re = Cost of equity
  • Rd = Cost of debt
  • Tc = Corporate tax rate

Who Should Use a WACC Calculator?

This tool is ideal for:
  • Financial analysts
  • Business owners
  • Investors
  • MBA students
  • Accountants and CFOs

If you’re involved in corporate finance, investment analysis, or startup planning, this calculator will be an invaluable resource.

Understanding Cost of Capital

Before diving into WACC, let’s clarify what cost of capital means. It’s the cost of acquiring funds—whether through equity or debt—to support your company’s operations or investments.

  • Equity funds come from shareholders and internal reserves.
  • Debt funds come from loans, bonds, or credit lines.
  • Each has a “cost”:
  • Cost of debt is the interest you pay.
  • Cost of equity is the return expected by shareholders.
The Weighted Average Cost of Capital blends both costs, giving you a clearer picture of what it takes to fund your business sustainably.

Real-Life Example of WACC

Let’s say you need $1 million in capital and have three options:
Option 1: 100% Debt at 12% interest
WACC = 12%
Option 2: 100% Equity at 20% expected return
WACC = 20%
Option 3: 50% Debt, 50% Equity
WACC = (0.5 × 12%) + (0.5 × 20%) = 16%
This third option gives you a balanced approach—lower cost than full equity, with manageable risk compared to full debt.

Detailed WACC Example With Multiple Sources

You need $1,000K, funded as follows:
  • Equity: $350K (35%) at 20% cost
  • Preferred Shares: $150K (15%) at 15% cost
  • Loans: $300K (30%) at 12% cost
  • Bonds: $200K (20%) at 11% cost
  • Tax rate: 30%
Adjusted for tax shield on debt:
WACC = (0.35×20%) + (0.15×15%) + (0.30×12%×(1-0.30)) + (0.20×11%×(1-0.30))
= 7% + 2.25% + 2.52% + 1.54% = 13.31%
So your company’s WACC is 13.31%, reflecting the blended cost of funding after taxes.

Why WACC Matters in Business

1. Helps Compare Projects

Use WACC as the discount rate in DCF models. If a project’s IRR > WACC, it adds value.

2. Improves Capital Structure Decisions

A balanced mix of debt and equity helps manage risk while optimizing costs.

3. Evaluates Company Performance

WACC serves as a benchmark for assessing whether returns exceed capital costs.

Advantages of Using an Online WACC Calculator

  • User-friendly: No spreadsheets or formulas needed
  • Instant results: Save valuable time
  • Accurate outputs: Minimize calculation errors
  • Completely free: Use it anytime, no subscription required

FAQs About WACC

1. What is a good WACC?

It varies by industry. Generally, a lower WACC is better—it means your financing is more affordable and less risky.

2. Why is WACC important in valuation?

It’s used as the discount rate in Discounted Cash Flow (DCF) analysis to calculate the present value of future earnings.

3. Does WACC change over time?

Yes. Changes in market rates, debt levels, or equity valuations can shift your WACC.

Conclusion: Simplify Your Financial Analysis

The WACC Calculator is an essential tool for anyone involved in corporate finance, valuation, or investment analysis. Whether you're a business owner planning growth or an investor evaluating risk, knowing your Weighted Average Cost of Capital helps you make better, data-driven decisions.
Try the calculator above and gain financial clarity in seconds!